44-3523.

Motor vehicle service contract reimbursement insurance policy; requirements; failure to timely provide covered service; effect.

(1) No motor vehicle service contract reimbursement insurance policy shall be issued, sold, or offered for sale in this state unless the policy conspicuously states that the insurer will either reimburse or pay on behalf of the motor vehicle service contract provider any covered sums the motor vehicle service contract provider is legally obligated to pay or, in the event of the provider's nonperformance, will provide the service that the provider is legally obligated to perform according to the provider's contractual obligations under the motor vehicle service contracts issued or sold by the provider in this state.

(2) In the event covered service is not provided by the motor vehicle service contract provider within sixty days of proof of loss by the service contract holder, the service contract holder is entitled to apply directly to the insurer providing the motor vehicle service contract reimbursement insurance policy.

(3) The motor vehicle service contract reimbursement insurance policy shall completely and fully reimburse or pay on behalf of the motor vehicle service contract provider all repair costs incurred under the motor vehicle service contract. All unearned premium reserves and claim reserve funds shall be established as liabilities on the books of the insurer in accordance with statutory accounting practices. This subsection shall not apply to programs directly obligating an automobile dealer to perform under the motor vehicle service contract.